Saturday, April 24, 2010

Scriabin...I should be practicing this...

...not worrying about Bernake and company...

In any case this is one of the best performances I have heard of these pieces. Ivo Pogorelich is an amazing talent, I encourage people to discover Scriabin and also Pogorelich...



Ron Paul got it...we need government officials who do

Ron Paul gets it...Obama, Bush, Paulson, Summers, Geithner, Bernake, Rubin, Goldman Tax, JP Morgan do not. The sad fact is that this will end badly for them as well as us...though they may still be looking out of corner offices as people are protesting. However, if I could wish that it ended badly for just them...they would be getting what they deserve.
Capitalism should not be condemned, since we haven’t had capitalism. A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank. It’s not capitalism when the system is plagued with incomprehensible rules regarding mergers, acquisitions, and stock sales, along with wage controls, price controls, protectionism, corporate subsidies, international management of trade, complex and punishing corporate taxes, privileged government contracts to the military-industrial complex, and a foreign policy controlled by corporate interests and overseas investments. Add to this centralized federal mismanagement of farming, education, medicine, insurance, banking and welfare. This is not capitalism! [...]
Speculative bubbles and all that we’ve been witnessing are a consequence of huge amounts of easy credit, created out of thin air by the Federal Reserve. We’ve had essentially no savings, which is one of the most significant driving forces in capitalism. The illusion created by low interest rates perpetuates the bubble and all the bad stuff that goes along with it. And that’s not a fault of capitalism. We are dealing with a system of inflationism and interventionism that always produces a bubble economy that must end badly.
Capitalism didn’t give us this crisis of confidence now existing in the corporate world. The lack of free markets and sound money did. Congress does have a role to play, but it’s not proactive. Congress’s job is to get out of the way. Ron Paul - 2002
Thanks to jose for sending me this quote.

Friday, April 23, 2010

The Warning: the one Larry Summers wanted gone

"I didn't know Brooksley Born," says former SEC Chairman Arthur Levitt, a member of President Clinton's powerful Working Group on Financial Markets. "I was told that she was irascible, difficult, stubborn, unreasonable." Levitt explains how the other principals of the Working Group -- former Fed Chairman Alan Greenspan and former Treasury Secretary Robert Rubin -- convinced him that Born's attempt to regulate the risky derivatives market could lead to financial turmoil, a conclusion he now believes was "clearly a mistake."


Born's battle behind closed doors was epic, Kirk finds. The members of the President's Working Group vehemently opposed regulation -- especially when proposed by a Washington outsider like Born.


"I walk into Brooksley's office one day; the blood has drained from her face," says Michael Greenberger, a former top official at the CFTC who worked closely with Born. "She's hanging up the telephone; she says to me: 'That was [former Assistant Treasury Secretary] Larry Summers. He says, "You're going to cause the worst financial crisis since the end of World War II."... [He says he has] 13 bankers in his office who informed him of this. Stop, right away. No more.'"


Greenspan, Rubin and Summers ultimately prevailed on Congress to stop Born and limit future regulation of derivatives. "Born faced a formidable struggle pushing for regulation at a time when the stock market was booming," Kirk says. "Alan Greenspan was the maestro, and both parties in Washington were united in a belief that the markets would take care of themselves."


Now, with many of the same men who shut down Born in key positions in the Obama administration, The Warning reveals the complicated politics that led to this crisis and what it may say about current attempts to prevent the next one.


"It'll happen again if we don't take the appropriate steps," Born warns. "There will be significant financial downturns and disasters attributed to this regulatory gap over and over until we learn from experience."

http://www.pbs.org/wgbh/pages/frontline/warning/view/

My comments are simple. Firstly this is a MUST WATCH video...please follow the link above, as the embed version is not working.

Frontline did an excellent job, but they still reflect the essential illusion that free markets caused the problem and regulation could have solved it. The reality is that the reason Greenspan, Rubin, Summers and Geithner supported the regulations and legislation that fostered and allowed these markets and their transactions to exist in the first place, is that the policies were specifically designed to attempt to coverup the total failure of the Bretton Woods and Federal reserve systems of theft and currency devaluation. 

The only way to mask the failures was to specifically endorse the creation and implementations of facilities that enabled the perception of ultimate risk insurance and foster the illusion of significantly greater amounts of unencumbered cash in the financial system. The act of writing, buying or speculating with derivative products creates significant leverage but also vis-a-vie that leverage miraculously large amounts of theoretical cash with only minimal real collateral requirements and almost infinite flexibility since the price movements of synthetic securities are not governed solely by underlying prices. Theoretical models that can support a much more flexible interpretation of the valuations, which is a required to propagate a ponzi scheme that is its last stages.

The disaster was NOT created by freemarkets. The fed and these band of thieves deliberately implemented schemes to foster a pyramiding process to try to cover up their failed ponzi schemes. 

What is truely disturbing is that Mr. Greenspan could only say he "...had discovered a Flaw" - yes, a single flaw in his model. I am afraid to say his arrogance knows no bounds and his knowledge of financial products and economics is about as capable as his successor Mr. Bernake. The conditions we are currently in could not exist, would not exist and would not have been incepted without manipulation by the Fed, crony capitalism and socialized markets. Mr. Greenspan presided over the whole operation...I wonder if he is proud of himself? However, in my opinion, Mr. Greenspan is a disgrace, as are most of the officials in this documentary.

The EURO...I've written last year about its trip to oblivion...

and things are pretty much on track for a dismantling of the best laid plans and manipulations of the Fed and the central bankers. (see The EURO - starting a trip to oblivionWith the majority of the countries that are members of the EURO zone are in some stage of insolvency...so what's next?

Nothing good I am afraid...

More at The Real News

Larry Summers - the dork

Notice the really shifty eye movements when this guy is lying...its really sad, actually, that we have an idiot like this running things.

TLT false breakout working so far

Currently, retesting the downtrendline...if this plays out as expeted we would break it to the downside.

Gerald Celente on Bernake



SEC and Pornography:

Workers Spent Hours on Porn Sites Instead of Stopping Fraud
Gov't Report Finds Securities and Exchange Commission Employees Surfing Pornographic Websites at Work
By JONATHAN KARL April 22, 2010
Obama argued for more government regulation over the financial industry, a new government report reveals that some high-level regulators have spent more time looking at porn than policing Wall Street.
The investigation, which was conducted by the SEC's internal watchdog at the request of Sen. Chuck Grassley, R-Iowa, found 31 serious offenders over the past two and a half years. Seventeen of the offenders were senior SEC officers with salaries ranging from $100,000 to $222,000 per year.The Securities and Exchange Commissionis supposed to be the sheriff of the financial industry, looking for financial crimes likeBernard Madoff's Ponzi scheme. But the new report, obtained by ABC News, says senior employees of the SEC spent hours on the commission's computers looking at sites like naughty.com, skankwire, youporn, and others.
Eight Hours a Day Spent on Porn Sites
One senior attorney at SEC headquarters in Washington spent up to eight hours a day accessing Internet porn. When he filled all the space on his government computer with pornographic images, he downloaded more to CDs and DVDs that accumulated in boxes in his offices.
Another SEC accountant attempted to access porn sites 16,000 times in a single month.An SEC accountant attempted to access porn websites 1,800 times in a two-week period and had 600 pornographic images on her computer hard drive.
In one case, the report said, an employee tried hundreds of times to access pornographic sites and was denied access. When he used a flash drive, he successfully bypassed the filter to visit a "significant number" of porn sites.
The employee also said he deliberately disabled a filter in Googleto access inappropriate sites. After management informed him that he would lose his job, the employee resigned.
A similar SEC report for October 2008 to March 2009 said that a regional supervisor in Los Angeles accessed and attempted to access pornographic and sexually explicit Web sites up to twice a day from his SEC computer during work hours.

Porn Problem Began as Economy Collapsed 
Ironically, the report says most of these cases began in 2008, just as the financial system began to collapse. The same SEC officers who should have been safeguarding the economy were instead spending their working hours surfing the Internet for pornography, and the problem hasn't stopped. 
The most recent case cited in the report is from just four weeks ago.

Thursday, April 22, 2010

William Black overview of new CDO litigation potentials...

Russell 2000 Futures at key levels

Fib convergences here...however, we are in a strong uptrend. Treasuries are still short, therefore, my interpretation is that further upside would be attracted to the next fib convergence levels and resistance levels. Action there will be key.

Architectural or architected?

People are still wondering...I guess...My question is: "Is the fed buying all the inflation assets?" or is that going to be the 911 debate fro the markets.

UWM 30 minute system closed another great trade

If you are tired of market manipulation...

this may be interesting!...Bernake or Geithner are kind of dry at this point.

The Dancing Walrus And Trainer (HQ)
Uploaded by IndyRacer2. - Watch funny animal videos.

TLT Daily RVS System since Inception

Currently, TLT is held short by the system...this is the PL since inception of TLT for a unleveraged trades with starting account capital of $450,000. That does not mean that all $450,000 is allocated to live trades. The allocations are conservative on a percentage of assets basis.

Tuesday, April 20, 2010

SSO 30 min RVS closes trades

TLT setup...

This is a chart that I watch for discretionary trading...shows setups well. This setup is at cycle resistance in a confirmed downtrend in a persistent down cycle and a sell setup on the m3WR.

Also, there are multiple resistances at these levels.

From a technical perspective, a breakout of the trendline is a high risk of being false and may reverse to new lows. If that's the case, its another example of why its so hard to trade trendlines.

This is the system chart:

UWM Relative Value System Update

SSO 34 minute system closes postion

Not too bad...

Sunday, April 18, 2010

How JP Morgan Lost $880 million on one deal

I think they were as optimistic in 2007 as they are now...I wonder if JPM was  lowering their loan reserves to manipulate earnings then too?
...by mid-2006, JPMorgan joined the herd. It hired bankers to expand its CDO team and got to work.
A few months later -- in early 2007 -- Magnetar and JPMorgan banged out a deal. Unlike the earlier CDOs it helped create, Magnetar didn't name this one after a constellation. Opting for a more literal name, they called the deal "Squared," after the term for a CDO that was made up of other CDOs. Squared was filled in part with other CDOs Magnetar had helped create.
According to a person familiar with how the deal came together, Magnetar committed to purchase $10 million worth of Squared's equity. Magnetar's purchase allowed JPMorgan to create and sell a $1.1 billion CDO. As it had on previous deals, Magnetar pushed the bankers to select riskier bonds. "They really cared about it," said the person involved in the deal. "They wouldn't pull punches. It was always going to be crappier."
The hedge fund requested that Squared have slices from many Magnetar CDOs, including Auriga, Carina, Libra, Pyxis and Virgo. They all went into the deal. Magnetar also successfully pushed for Squared to include slices from one of the Abacus deals, a group of CDOs that, as the New York Times later reported, Goldman Sachs had created and bet against.
JPMorgan earned $20 million in creating Squared, according to the person involved in the deal.
JPMorgan's sales force fanned out across the globe. It sold parts of the CDO to 17 institutional investors, according to a person familiar with the transaction. The deal closed in May 2007, nearly a year after housing prices had peaked. Within eight months, Squared dropped to a fraction of its initial value.
Just about everybody lost out, including Thrivent Financial for Lutherans, a Minnesota-based not-for-profit fraternal organization, whose $10 million investment was wiped out. Thrivent declined to comment.
Small pieces of Squared, as well as Magnetar's CDO Norma, also ended up in mutual funds run by Morgan Keegan, a regional investment bank based in Memphis, Tenn.
The funds, advertised as conservative investments, cratered after betting on various exotic assets. Morgan Keegan was sued by individual investors who claimed that they were misled about the risks. Among the investors was former Chicago Bulls player Horace Grant, who was awarded $1.4 million in arbitration. This week, the SEC accused two Morgan Keegan employees of misleading fund investors about the value of its holdings in CDOs. Morgan Keegan called the charges "factually inaccurate" and promised to defend itself "vigorously." Morgan Keegan did not respond to a request for comment on the specifics of the two Magnetar CDOs.
The biggest loser was JPMorgan Chase itself, which had kept the large, supposedly safe top slices of Squared on its books, without hedging itself. The bank lost about $880 million on the CDO. JPMorgan declined to comment on the details of the transaction.
Magnetar came out a winner. The fund earned about $290 million on its bet against Squared, according to a person familiar with the deal. Magnetar declined to comment.
The above excerpted from propublica.org.  
 
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